A Pennsylvania Court found Reliance Standard abused it’s discretion when it terminated benefits for a disabled financial advisor with neurogenic muscular atrophy and diabetic polyneuropathy after ordering an IME and two peer reviews.
Reliance Standard was ordered by the Third Circuit of the United States Court of Appeals, to retroactively reinstate Mr. Leo Noga’s long-term disability (“LTD”) benefits.
Background
Mr. Leo Noga was a financial advisor diagnosed with neurogenic muscular atrophy and diabetic polyneuropathy. Reliance Standard initially approved Mr. Noga’s claim for LTD benefits after determining that he was disabled from performing the material duties of his regular occupation.
For the next two years, Reliance Standard would regularly review Mr. Noga’s updated medical records to determine his eligibility for continued LTD benefits. During these two years, four different nurses on six separate occasions recertified Noga’s eligibility for continued LTD benefits.
However, less than a month after a nurse recertified Noga’s eligibility, Reliance Standard requested Mr. Noga undergo an independent medical examination (“IME”) with a physiatrist. The physiatrist opined that Mr. Noga’s impairment was permanent, but he was still “capable of gainful employment.” Reliance Standard then terminated Mr. Noga’s LTD benefits.
Mr. Noga administratively appealed the termination of his LTD benefits with updated medical records. Reliance Standard had a registered nurse review Mr. Noga’s updated medical records. Reliance’s nurse determined Mr. Noga had no work capacity. The claims analysist then reopened the claim, once again approving his disability.
However, the next day, that same analyst changed their mind. They requested two more peer reviews of Mr. Noga’s appeal. Two doctors, an endocrinologist and an occupational medicine specialist, who did not physically examine Mr. Noga, stated he could work on a full-time basis. Reliance Standard once again, terminated Mr. Noga’s benefits. Mr. Noga then filed lawsuit under ERISA against Reliance Standard.
The Court’s Decision
The Court found two problems with Reliance Standard’s handling of Mr. Noga’s appeal.
- The request for the IME.
The Court found that the “timing and professed need” for the IME was irregular and unnecessary, given that four different nurses on six separate occasions recertified Noga’s eligibility for continued LTD benefits.
- The Court found the request for the two peer reviews was also unusual in timing because it was asked for a day after reinstating Mr. Noga’s benefits.
The Court also found that the two peer reviews were unnecessary because the registered nurse at Reliance Standard had already determined Mr. Noga’s lack of functional capacity.
The Court noted that Reliance Standard’s own nurses recertified Mr. Noga’s eligibility for benefits and yet they ignored their own recommendations to seek an IME and two peer reviews. It was for these reasons the Court found that Reliance Standard abused its discretion. Reliance Standard was ordered to retroactively reinstate Mr. Leo Noga’s long-term disability benefits.
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